Supply ministry re-crafts subsidies cut law deals after angry protests

Adham Youssef
4 Min Read
Government’s bread subsidy system will take effect in Cairo, after being implemented in Port Said, Ismailia and Suez governorates. (AFP photo)

Minister of Supply and Internal Trading Aly Meselhi decided on Tuesday to make amendments to the decision he took earlier this week which cut shares of bread subsidies for cardholders, leading to angry protests.

In a press conference after the crisis reached a peak with citizens blocking roads, Meselhi apologised to the citizens who did not manage to receive their rations of subsidised bread, asserting the ministry’s respect to the citizens. He announced that the controversial decisions will be re-crafted and paper subsidy cards will be digitalised.

He clarified that protests took place in Alexandria, Giza, Kafr Al-Sheikh, Assuit, Minya, and Fayoum. In Imbaba, roads were cut and subsidy offices were raided by citizens. In Alexandria and Kafr Al-Sheikh, protesters blocked roads and chanted against the government.

The amendment will include raising the portions of loaves in Cairo, Alexandria, and Kafr Al-Sheikh, the main places which witnessed disturbances.

The origin of the problem goes back when Meselhi decided that subsidy offices responsible for distributing bread will give out only 500 loaves of bread, instead of the original portion of 1,500. The original decision also stated that holders of paper cards and those who do not own a card should have their portions decreased from 20 loaves to 5.

Meselhi said that the ministry will start changing the paper cards to the digital cards, while vowing to persecute any personnel in state-owned or state-sponsored outlets that refuse to give out rations to citizens.

He also pointed out that President Abdel Fattah Al-Sisi assigned the ministry to present the necessary support to the citizens.

According to state and local media, Wednesday witnessed more calmness around bread outlets, with almost no protests reported.

The decision of the Central Bank of Egypt (CBE) to float the Egyptian pound on 3 November has negatively affected many citizens and indicated that the government will have to remove subsides.

The decision came as part of the implementation of certain terms decided upon with the IMF to provide Egypt with $12bn to help the state in the process of economic reform. For a long time, Egypt has sought an IMF loan, but was unwilling to succumb to certain terms.

According to Focus Economics’ February “Consensus Forecast Middle East & North Africa” report, the Egyptian economy continues to suffer from the harsh consequences of the government’s reform programme. The liberalisation of the Egyptian pound has taken its toll on the prices of goods and a subdued demand as a result of skyrocketing inflation levels, the report added.

Political parties, politicians, and rights groups have condemned the government for floating the Egyptian pound, believing that low-income citizens are the only ones who will suffer the dire consequences of this decision.

On Wednesday, several parties, such as the Socialist Popular Alliance, Al-Karamah, and the Egyptian Social Democratic Party, condemned the decision of Meselhi, saying the government’s decision making is being influenced by the policies of the IMF.

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